Best Practices in Leadership, Strategy and Sales & Marketing

November 07, 2008

Does Your Dashboard of Performance Measurements Include a Warning Light?

Count me as one of the last idealists. Or perhaps the last of the naïve idealists. In a world filled with Quality Management Systems and Performance Measurement techniques backed by legions of people trained to implement and sustain quality performance, it seems reasonable to me that organizations are capable of not only keep themselves from imploding, but that they are armed to the teeth with tools to ensure prosperity beyond the wildest dreams of Dr. Deming.

As an aside, Dr. Deming once famously indicated that it was his hope that his legacy was to keep U.S. companies from committing suicide. Perhaps it is good that he is not here to see the firms elbowing each other out of the way in an attempt to get to the front of the line on the edge of the cliff.

The U.S. auto companies are almost finished carrying out their joint suicide pact in a world where the rules for success as an automobile company are on display for everyone to see.

Motorola, an icon of U.S. electronics has systematically destroyed itself by flailing and flailing in the mobile device (read: cellphone) world, and stands a reasonable chance of failing to survive without drastic action. (See my earlier post on the Dollar Bill Auction to get a feeling for Motorola’s problems.) The fact that Motorola is a Baldrige winner, one of the founding fathers of Six Sigma and an organization staffed with brilliant engineers, yet it cannot seem to engineer success is both puzzling and frustrating.

Earlier this week, Boeing indicated that they would again delay the launch of its now several years late and much hyped 787 Dreamliner. The article indicated that the latest problem had to do with quality issues related to a new type of fastener required for the high tech and lightweight materials being used in the plane. The advance sale of 900 of these puppies at $178 million a piece and the expected 20% fuel consumption savings has customers hopping mad over this latest in a series of seemingly endless project management and supply chain problems.

How does this happen in a world filled with balanced scorecards and legions of certified quality professionals constantly measuring, monitoring and striving to improve performance? I suspect that my own answer is that while we have ample tools available for our use in building, the one tool that we haven’t yet mastered is staring back at us in the mirror.

In discussions and lectures with the up and coming generation of leaders, there is widespread cynicism over the intentions and the capabilities of many of their firm’s senior leaders. There is little faith expressed that their leaders understand their firm’s key drivers and little confidence that the leaders are taking actions and measuring performance based on anything other than preconceived notions of what they think is right. Fewer organizations than you might think are doing anything to engender employee satisfaction…which is ironic given the mountains of data that indicate that employee satisfaction flows through to customer satisfaction and strong financial performance.

This current generation of senior leaders is failing, and the very imbalanced scorecard is visible all around us. The business cycle is one thing, but our problems go way beyond the business cycle to our preconceived notions of how to lead, how to run businesses, how to fuel innovation and how to create an environment where talent and calculated risk-taking are carefully cultivated.

Many organizations are hives of activity with no vector and the output is chaotic. Firms and top leaders need to quit guessing and start using the tools available to identify key business drivers and to measure and monitor the efforts and outcomes of focusing on those drivers.

The Bottom-Line for Now:

There’s nothing like a good old-fashioned crisis to engender creativity. Well, we have one. In spite of the difficulties, it’s a great opportunity for organizations and leaders to quit paying lip-service to cliché’s like customer-satisfaction, performance excellence and quality. It’s a big world with a growing population and while the forecast is stormy now, the seas will eventually calm and the sun will shine. It will be interesting to see who has the courage and fortitude to do the things necessary to make it through the storm. Even money that we find a whole new generation of leaders in the process.